Prasad Sabbineni is co-Chief Executive Officer at MetricStream.
In today’s digital world, the risk of targeted cyberattacks can no longer be ignored. Whatever form the attack takes, no company is safe. If you’re not directly vulnerable, you probably have third-party partners who are.
The Global Risks Report 2023 from the World Economic Forum lists “widespread cybercrime and cyber insecurity” as a top global risk. The price tag for solving cybercrime is skyrocketing at the same time: Ponemon Institute and IBM estimate the average cost of a data breach $4.35 million and a ransomware attack even higher, at $4.54 million – and that doesn’t include the ransom, only the recovery costs.
As IT and cyber controls play a vital role in preventing, detecting and mitigating cyber threats and attacks, the pressure is on CISOs and CSOs to not only maintain the system infrastructure, but also proactively protect against future attacks. Cybersecurity teams can face the increasing challenge of identifying critical assets within an organization and their degree of vulnerability, but adding a cyber risk management program can help.
Financial risk professionals will be well acquainted with the practice, as innovation in the global banking system – including the adoption of online banking – has required us to develop security and compliance controls that minimize operational risk around real-time transactions and the protection of party assets can reduce and identities. However, due to digital innovation and transformation beyond the financial sector, cyber risk management has now become a necessity for every business.
Cybersecurity versus Cyber risk management
It is important for leaders and boards to remember that cyber risk management and cybersecurity are not the same thing, although the two practices are interrelated.
Cybersecurity teams focus on digital entities: they establish and test processes to protect an organization’s digital assets, systems, devices, and data from threats.
Cyber risk management strategies go beyond the digital to include other types of IT-related compliance and regulatory risks: threats from third parties and third-party IT vendors, software and hardware insecurities, cloud security, and compliance with frameworks such as GDPR, PCI, and HIPAA.
Establish a cyber framework and internal controls
A complex and layered cyber risk management strategy can show cybersecurity teams where vulnerabilities lie and what controls to implement to continuously monitor risk while complying with changing regulations. Creating uniformity between controls and the frameworks to which they are applied is a challenge, even for seasoned cyber risk professionals. Multiple cybersecurity frameworks can mean that an organization is testing with duplicate or conflicting risk controls, which can cause confusion and create gaps in an organization’s risk exposure.
To optimize frameworks, risk teams should spend time harmonizing their controls more effectively. This is one way organizations can ensure they are aware of the regulations. With regulatory reporting expected to increase in 2023, organizations would benefit on multiple fronts.
Integrating an automated GRC platform with control harmonization can help effectively break silos, strengthen the organization against risk, and simplify and consolidate compliance and reporting activities.
Reporting the value of risk investments to the board
According to Gartner, “by 2025, 40% of boards will have a dedicated cybersecurity committee overseen by a qualified board member.” As boards become more “cyber-aware,” they will expect CISOs and CSOs to play a critical role in developing the organization’s cyber risk culture and to routinely disclose the organization’s cyber risk position. Quantifying cyber risk can help leaders measure, manage, and report risk in currency terms, helping boards and executives better understand their risk exposure and what’s at stake in a monetary asset.
Cyber risk management can help organizations meet governance requirements for reporting cybersecurity risks by enabling a more regular pulse of risk assessment. Boards looking to understand the return on their cyber risk investment have plenty of data to work with when analyzing the long-term effectiveness of their risk management strategy.
Strengthening risk appetite for a safer future
Understanding your organization’s strengths and weaknesses in relation to risk, and the strategies and controls in place to mitigate those risks, can help your leadership team map out the journey ahead. With a clear understanding of the processes and assets that have the highest intrinsic business value and mission criticality, leaders can firmly support their cyber defense strategies and investment decisions.
As executive leadership continues to demand more from CISOs and CSOs, lean on an automated GRC platform with an interconnected risk management approach to guide, simplify and maximize your organization’s cyber risk strategy.
Include a GRC platform
The right GRC solution for any business delivers actionable information quickly and efficiently, with minimal impact on operations. Risk management software evolves with an organization in real time, taking into account new risk exposures and regulatory changes. So it is essential that the right GRC framework is specifically developed from the outset to align with business objectives. The most advanced programs are easy to configure and personalize with low-code or no-code cloud-based accessibility.
Before considering partners for a technology-based GRC solution, organizations should conduct a self-assessment to determine the company’s risk maturity (or “risk appetite”). Successful implementation of a GRC program starts with understanding the risk landscape around you and identifying the thresholds and limits you want to place around the risks you face.
Implementation challenges may include gaps in operations or succession planning; evidence of repeated processes without central ownership; a surplus of data with no aggregator or holistic view of that data; or a lack of communication between front-line business leaders and the first and second lines of defense.
A successful GRC approach requires a cultural understanding of GRC merits and shared agreement on the company’s most valuable assets. Owners of every business unit within the organization should be encouraged to share data for maximum risk visibility. As you pursue the GRC solution that best suits your business, it’s important to remember that all risks are interrelated; to achieve resilience and accelerate compliance, collaboration is key. Progress will not happen in silos.